One of the major development problems in the southern African region and South Africa in particular relates to the phenomenon of high failure rates among Small Medium and Micro Enterprises (SMMEs). The important role of SMMEs in creating jobs and incomes is widely acknowledged. SMMEs are relatively inexpensive to establish and have the potential to generate economic growth in the southern African region. One major dilemma of this sector, however, is the short lifespans of SMMEs. Past research has focused on understanding failure of small businesses by mainly identifying factors of failure without subjecting them to step-wise causality testing. This research closes that gap and uses a retrospective study, coupled with the critical realist approach, to understand the causes of the high failure rates of SMMEs. The merit of this approach lies in the attention it gives to an historical understanding of past processes and how a determined effort could be initiated to change the current “historical reality” of the factors behind the failures, specifically in South Africa. A sample comprising 254 owner-managers of SMMEs from the Gauteng, Limpopo and Mpumalanga provinces in the Republic of South Africa as well as from Gaborone in Botswana was subjected to an interview between January 2007 and December 2007. Data were collected by means of a semi-structured research instrument which probed the failure of the interviewees’ businesses across a period spanning seven years between 2000 to 2006. The analysis of the data involved the use of both quantitative and qualitative research methodologies. The findings indicate that four explanatory factors were paramount: “monitoring and control” (factor 1); “experience and planning in finance and marketing” (factor 2); “income constraints” (factor 3), and “cash control” (factor 4). Based on the findings, the following recommendations, if implemented, may assist with lowering the high failure rates: First, the mindsets of the owners of the failed businesses were found to be a fundamental factor in the closure of the businesses. Radical programmes for changing these mindsets are therefore critical. Second, with the mindsets changed, venture skills training programmes could then be introduced involving learning and training. By so doing, it is hoped that the void left by low levels of education and business experiences in the SMME sector would be reduced. Finally, at the policy-making level, the required assistance should be tilted more towards government-corporate involvement, in assisting the SMME sector in the form of financial subsidies for start-up capital, small business-builder programmes, and business mentoring programmes, among others. / Thesis (PhD)--University of Pretoria, 2011. / Business Management / unrestricted

The study was based on the evaluation of specific business–related factors concerning small businesses in the formal sector. The purpose of this study was to gain a clear understanding of the current education level of employees in the small business industry. Income and business related costs applicable to small businesses and formal business support was also evaluated in terms of its availability to small businesses. By means of investigation it was possible to conclude to what extent small businesses contribute towards economic growth in South Africa. The South African government is definitely aware of the important role which small businesses play in economic growth and poverty reduction. Small businesses were analysed to determine the education level of both employees and business owners. The contribution which business owners made to training and development of their employees was also investigated. The income over a period of five years were analysed to determine the financial sustainability of the businesses. The impact of business related costs and the global economic recession were also investigated to determine the future sustainability of small businesses. The empirical research was conducted at a financial institution in Klerksdorp to assess the contribution which small businesses made towards economic growth and development. Small businesses' contribution towards education and training must be reconsidered as limited opportunities exist within small business for training. Small business owners cannot afford to send their employees away to obtain training and mainly make use of on–the–job training. SETAS must focus more on small businesses when it comes to training and alternative training methods must be reconsidered. The implementation of complex labour legislation and the minimum wages law make unskilled labour very expensive for small business owners. This must be reconsidered as small businesses cannot afford to employ additional employees. Formal business support available to small business owners were perceived not to be marketed very well although the lack of internet access may contribute to the limited knowledge in this regard. The South African government must reconsider its strategy to utilize small businesses to create jobs and to develop skills. / Thesis (M.B.A.)--North-West University, Potchefstroom Campus, 2011.

The study was based on the evaluation of specific business–related factors concerning small businesses in the formal sector. The purpose of this study was to gain a clear understanding of the current education level of employees in the small business industry. Income and business related costs applicable to small businesses and formal business support was also evaluated in terms of its availability to small businesses. By means of investigation it was possible to conclude to what extent small businesses contribute towards economic growth in South Africa. The South African government is definitely aware of the important role which small businesses play in economic growth and poverty reduction. Small businesses were analysed to determine the education level of both employees and business owners. The contribution which business owners made to training and development of their employees was also investigated. The income over a period of five years were analysed to determine the financial sustainability of the businesses. The impact of business related costs and the global economic recession were also investigated to determine the future sustainability of small businesses. The empirical research was conducted at a financial institution in Klerksdorp to assess the contribution which small businesses made towards economic growth and development. Small businesses' contribution towards education and training must be reconsidered as limited opportunities exist within small business for training. Small business owners cannot afford to send their employees away to obtain training and mainly make use of on–the–job training. SETAS must focus more on small businesses when it comes to training and alternative training methods must be reconsidered. The implementation of complex labour legislation and the minimum wages law make unskilled labour very expensive for small business owners. This must be reconsidered as small businesses cannot afford to employ additional employees. Formal business support available to small business owners were perceived not to be marketed very well although the lack of internet access may contribute to the limited knowledge in this regard. The South African government must reconsider its strategy to utilize small businesses to create jobs and to develop skills. / Thesis (M.B.A.)--North-West University, Potchefstroom Campus, 2011.